Two important economic thinkers of the early 20th century, John Maynard Keynes and Friedrich A. Hayek, have very different economic views. Keynes is among the most famous economic philosophers. Keynes, whose theories gained reputation during the Great Depression of the 1930s, focused primarily on the failure of the economy. It is where the economy declines and finally hits rock bottom that Keynesian economics believes the answers to its eventual recovery lie. On the other hand, Hayek believed that studying the boom would provide answers to get the economy out of the bust that was sure to follow. Hayek supported the Austrian school of economics. John Maynard Keynes promoted a school of thought that became known after him, Keynesian economics. His theories arose from the Great Depression era. His ideas centered on the “bust” of the economy which of course during this time period would refer to the stock market crash of 1929. A key assumption in Keynesian economics is that the short-run aggregate supply curve (SRAS) is horizontal. The horizontal SRAS, combined with the fact that the equilibrium level of real GDP is demand-driven, makes inflation impossible. This means that in the short run there is no change in the price level. In addition to these, there are some other key assumptions on which the Keynesian model is based: businesses pay no direct taxes, they distribute all their profits to shareholders, gross private domestic investment equals net investment, and the economy it is closed to foreign trade (Miller 246). These, however, are not the only differences between the Keynesian and classical models. According to the classical model, the amount of savings is directly determined by the savings rate. Keynes…half of the paper…applies to certain levels of an economy that appears unstable. Hayek explained that when you simply pump money into an economy, inflation occurs and capital decreases in value. Now, this is an idea that you don't need to take an economics class to understand. Stimulating the economy through direct aid does not seem like an effective escape route from a recession or depression because the money citizens receive goes to the national deficit and will eventually have to be repaid (with interest). Works Cited EconStories. “‘Fear the Boom and Bust,’ a Hayek rap anthem against Keynes.” YouTube: Broadcast yourself. January 23, 2010. Web. April 18, 2011. "Friedrich August Hayek: The Concise Encyclopedia of Economics." Library of Economy and Freedom. Network. April 20, 2011.Miller, Roger LeRoy. Economy Today. 9th ed. Reading, MA: Addison-Wesley, 1997. Print.